Gold futures rise amid QE speculation

December gold futures rose in value on September 16, settling higher amid speculation that the Federal Open Market Committee would choose to reduce the pace of quantitative easing at its meeting that was scheduled for September 17.

The timeline that the Federal Reserve will use to taper these asset purchases has generated substantial visibility over the last several months, as these transactions have been credited with having a significant impact on the global asset markets.

The effect that such speculation has on the value of these securities, including gold, was illustrated in late June when markets reacted sharply to an announcement made by Federal Reserve Chairman Ben Bernanke that QE could be reduced in pace as soon as this year.

Reuters reported that many are now of the belief that these bond purchases will be lowered in volume at the September FOMC meeting. December gold rallied amid these predictions, settling $9.20 per ounce higher at $1,317.80. Societe Generale analyst Robin Bhar noted that Fed policymakers are well aware of the impact that such tapering will have on assets, but there is pressure for them to take action.